Final answer:
The question involves calculating economic concepts such as marginal cost, total revenue, total cost, and profit for a firm in a perfectly competitive market. Marginal cost is defined, and the profitability scenario is given at a price above average cost for a certain quantity.
Step-by-step explanation:
The question relates to a firm in a perfectly competitive market and involves understanding concepts such as marginal cost, total revenue, total cost, and profit. The marginal cost is calculated by dividing the change in total cost by the change in quantity, and for the firm mentioned, it is given by the function MC(q) = 2q + 10. In a perfectly competitive market, a firm is a price taker and can sell any amount of goods at the market price.
Profit is determined using the equation: profit = (Price)(Quantity produced) - (Average cost)(Quantity produced). When a firm's price is above its average cost, as in the example provided where the price is $16 and the average cost is $14.50 for a quantity of 40, the firm makes an economic profit.